How many jobs does clean energy create?

How many jobs does clean energy create?

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Declining costs of wind, solar power and energy efficiency is helping to drive a shift from fossil fuels generally — and coal in particular — to renewable energy and energy efficiency. From the first half of 2015 to the first half of 2016, renewable energy use rose by 9 percent while coal use in the U.S. dropped by 18 percent, according to the Energy Information Administration.

What does this shift mean for jobs? From 2014 to 2015 solar employment increased by 6 percent while employment in upstream oil and gas and support services dropped by 18 percent. This reduction reflects both declining coal consumption and continued reduction in labor intensity. There are now more jobs in the U.S. in solar than in either oil and gas extraction or coal mining.

What would a continued transition from fossil fuels — particularly coal — to renewable energy and energy efficiency mean for U.S. employment? The answer depends largely on how many jobs each sector creates — that is what is the employment intensity of each energy sector? The electricity sector involves millions of jobs, and arguments for one form of energy versus another usually involves claims about how many jobs investments in each form of energy will create.

There will continue to be hundreds of billions of dollars in investments in energy, so it matters a great deal if one form of energy creates a lot more jobs than another. There are confusing and contradictory claims about job creation from different forms of energy.

Energy-related employment is a slippery subject — are jobs permanent or just for one year (called job years)? Some job creation estimates count just direct jobs while others include indirect and induced jobs, so to be meaningful, a job creation claim must be an apples-to-apples comparison. 

There are a few good independent rigorous sources on job intensity of energy efficiency and renewable energy relative to other forms of energy. The chart below is from the World Bank:

World Bank

Job creation by energy sector in the United States

The World Bank estimates that U.S. wind and solar creates about 13.5 jobs per million dollars of spending, and that building retrofits — energy efficiency — creates 16.7 jobs per million dollars of spending. This is more than three times the 5.2 jobs per $1 million for oil and natural gas, and more than two times the 6.9 jobs per $1 million for coal.

A more detailed job analysis is provided by AltEnergyStocks, which finds 5.3 jobs per $1 million for fossil fuel investments, and a bit over three times this — 16.7 jobs per $1 million for clean energy (energy efficiency and renewable energy). Importantly, this analysis also documents the substantially higher quality and higher pay nature of clean energy jobs relative to fossil fuel employment.

U.S. state level energy employment impact analysis also finds large employment benefits from clean energy investments. For example, the Illinois Department of Commerce and Economic Opportunity, in a 2015 review (PDF) of state-level energy efficiency programs, found that an energy efficiency investment of $1 million creates 66 job years (this includes both direct and indirect jobs).

International studies also find large differences in labor intensity of clean energy relative to fossil fuels. For example, a 2014 U.K. Energy Research Center report, "Low Carbon Jobs," found that the average employment creation for fossil fuels is 0.14 jobs per Gigawatthour (coal 0.15, gas 0.12), that the average across all renewable energy is 0.65 jobs/GWh, and that the average across both renewable energy and energy efficiency is 0.80 jobs/GWh.

This broad government study finds that renewable energy creates 4.3 times as many jobs as coal and 5.4 times as many as natural gas. It also finds that job creation from clean energy generally (renewables plus energy efficiency) is 5.3 times greater than from coal and 6.7 times greater than from natural gas.

Renewable energy and energy efficiency clearly are several times more labor-intensive than fossil fuels. Clean energy jobs also generally are more distributed and are largely higher quality jobs. For these reasons, the ongoing shift to clean energy is very good news for employment and workers, and any politician interested in creating jobs should embrace and support the clean energy transition.